Protecting the Economy
Nearly four years after the Sept. 11 terrorist attacks, some experts have begun to revise the definition of terrorism. More than an effort to spread fear through civilian populations — to terrorize — terrorism also pursues economic goals. Here’s how Osama bin Laden evaluated the economic effect of Sept. 11 in a statement aired on Al-Jazeera in October of 2001:
“The first week (after the Sept. 11 attack) [Americans] didn’t work at all due to the psychological shock of the attack, and even until today, some don’t work due to the attack The cost of the building losses and construction losses? Let us say more than $30 billion.”
The economic effect of the attacks on the World Trade Center was clearly important to bin Laden.
As the events of Sept. 11 recede in time, the memory of human loss remains, but the economic shocks have faded. In fact, economic reviews since the attack have almost unanimously concluded that the U.S. economy is too large to be seriously or permanently damaged by a terrorist attack.
A year after Sept. 11, a Congressional Research Service report to Congress entitled “The Economic Effects of 9/11: A Retrospective Assessment” said “9/11 is more appropriately viewed as a human tragedy than as an economic calamity. Notwithstanding their dire costs in human life, the direct effects of the attacks were too small and too geographically concentrated to make a significant dent in the nation’s economic output.”
While the U.S. economy shrugged off the economic effects of the attack, it might not be so easy next time.
A new book by Stephen Flynn, a senior fellow in National Security Studies at the Council on Foreign Relations, suggests that viewing the economic effects of terrorism through the lens of Sept. 11 fails to see the mountain behind the boulder.
In “America the Vulnerable,” Flynn argues that the nation has failed to prepare adequately to prevent and respond to future attacks on U.S. soil, which could have enormous economic impacts. Flynn poses a scenario in which dirty bombs, built from parts acquired here and smuggled into the country in cargo containers, are detonated in the Port of New York and New Jersey, the Port of Miami, the Port of Los Angeles and the Ambassador Bridge that connects Detroit to Ontario. In addition to the enormous loss of life, Flynn believes such a series of events would shut down the U.S. economy and large parts of the global economy. U.S. ports of entry would close at marine terminals and airports throughout the country. Trains would stop. Trucks delivering goods along major corridors would be mired in massive traffic jams. The federal government would have to search all cargo containers inside U.S. borders to make sure there were no more bombs, a task that could take months. Wall Street would close for an extended period in an attempt to prevent a massive sell-off. International financial markets would plunge.
Cut off from exports and imports relied on by virtually every major industry from agriculture to retail to auto manufacturing, the American economy would grind to a halt. Available options would include reopening the transportation system and risking further attacks or remaining closed and crippling the economy for an extended period.
“We cannot afford to act as though Sept. 11 was just a freak event,” Flynn writes. “We must have the maturity both to live with the risk of future attacks and to invest in reasonable measures to rein in that risk.”
Flynn is not an alarmist. For 20 years, he served in the U.S. Coast Guard, watching the operations of U.S. ports. He served in the White House Military Office during the late 1980s and was director for Global Issues on the National Security Council staff in the 90s.
His analysis of terrorist threats proposes solutions that aim to secure key economic targets — which so far have seemed too imposing to deal with in a comprehensive way. Cargo containers entering the U.S. through ports and across borders, the transportation, financial and communications networks, the chemical industry and agriculture are all potential economic targets.
Flynn contends that spending to secure economic targets will likely yield benefits beyond security. “Public health investments to deal with biological agents or attacks on our food and water supplies will provide U.S. authorities with more effective tools to manage global diseases and pandemics,” he writes. “The measures we adopt to protect our infrastructure make it more resilient not only to terrorist attacks but to acts of God or human and mechanical error.”
Likewise, better equipment and training for first responders will provide benefits in improved performance.